Why democracy needs the rich
A new book argues that, in a democracy, an intellectual class that holds homogeneous, anti-capitalist views demands a counterweight of the wealthy contributing to politics, says Rainer Zitelmann
In 2021 and 2022, a representative survey on attitudes toward the market economy and capitalism was conducted in 34 countries. Among other things, respondents were presented with 18 positive and negative statements about capitalism. The result shows what particularly bothers people about capitalism – and what bothers them less. In 33 out of 34 countries (the only exception being Vietnam), the critical statement that “Capitalism is dominated by the rich, they set the political agenda” is among the five most frequently selected statements.
This is also the subject of the book by John O McGinnis, Why Democracy Needs the Rich. Unlike other books, it is not primarily about the – depending on the author’s perspective – positive or negative contribution of the rich to the economy. The main topic, as the book’s title suggests, is why the rich are important for the functioning of a democratic society. Democracy is often simply understood as rule by the majority, where each citizen has equal influence. McGinnis, by contrast, emphasizes the difference between direct and representative democracy. “The notion that everyone can wield anything approaching equal influence in our democracy is fundamentally unrealistic.”
Who wields influence?
In reality, there are groups that have far greater influence, such as journalists, intellectuals and entertainers. According to McGinnis, these groups in particular hold fairly homogeneous political views. Studies have shown, for example, that at American universities the ratio between professors with left-leaning and conservative views is 13:1. Left-leaning opinions also strongly dominate the media and the entertainment industry (Hollywood). These groups shape public opinion and have far more influence than the average citizen.
When wealthy individuals finance think tanks, this provides a counterbalance, especially since the rich are by no means as politically homogeneous as intellectuals. Campaign donations show that the ratio between wealthy individuals who support Democrats and Republicans is relatively balanced. A central thesis of the book: “While everyone has an equal vote, certain groups – those likely possessing a deeper understanding of the issues – naturally exert more influence. Critics of the wealthy’s influence often accept the additional sway of the intelligentsia because of their claims to greater knowledge, despite that group’s unrepresentative ideology and insularity from the broader citizenry and the political workings of the world. The impact of the wealthy thus provides a crucial counterweight, especially in a commercial republic where the flourishing of the market not only drives prosperity but also strengthens democracy.”
When journalists and intellectuals polemicize against the allegedly large influence of the rich, their primary aim is to preserve their own dominance in shaping public opinion
When journalists and intellectuals polemicize against the allegedly large influence of the rich, their primary aim is to preserve their own dominance in shaping public opinion. One of the problems, according to McGinnis, is that intellectuals are usually far removed from economic realities and possess little economic expertise.
Democratic societies tend toward conformity, and this conformity is particularly pronounced among academics and bureaucrats. Academics depend heavily on the opinions of their peers for their stature. “The pressures for conformity within academia have intensified over the years and ideological homogeneity has increased.” Among the rich, there are more nonconformists – people who are willing to go against the grain and advocate unorthodox views. Their economic independence sometimes allows the rich greater intellectual independence – I would add: it would be desirable if they made more active use of this.
Democracy also has its weaknesses, and the influence of the rich can sometimes help to mitigate them: “First, the rich, with their independent means, are better positioned to resist democracy’s proclivity to embrace conformity. Second, many wealthy people support excellence, particularly in the arts, arresting democracy’s slide toward mediocrity. Because they are less dependent on the state, they have both the means and the interest to question the expansion of government power, counteracting democracy’s tendency to create a paternalistic and fiscally unsustainable government. Their influence, in short, serves as a constraint on the natural excesses of majoritarian rule.”
John O McGinnis has written a very important and timely book, especially for the UK, where there is often strong polemic against the rich.
Rainer Zitelmann is an author and historian